Automotive Component Suppliers Research Articles

Investigating the impact of smart manufacturing on firms' operational and financial performance

PurposeSmart manufacturing (SM) lies at the core of Industry 4.0. Uniform adoption of SM across business partners is crucial to exploit its value creation potential. However, firms' willingness to invest in SM is limited by insufficient or inconclusive evidence on its performance-related benefits. To close this gap, this paper develops and tests a model linking SM adoption to firms' financial performance. Improvements along the four dimensions of operational performance (i.e. cost quality, delivery and flexibility) mediate this relation.Design/methodology/approachThis study follows an empirical research approach. In particular, survey data from 234 automotive component suppliers are analyzed via covariance-based structural equation modeling to explore the link between SM adoption and operational performance. Survey data are then matched with secondary data from balance sheets of 81 firms to investigate the impact of SM on financial performance via partial least square structural equation modeling.FindingsFindings highlight that adoption of SM results in improvements in cost, quality, delivery performance, thus suggesting that SM is a mean to overcome performance trade-offs. Improvements in operational performance enabled by SM do not give rise to superior financial performance, thus implying that SM might support firms in maintaining the competitive position in the market, but could be insufficient to generate higher margin.Originality/valueResults have implications for SM research and for manufacturing executives engaged in the adoption of SM, as they provide a detailed analysis of the impact of SM on operational performance and clarify the effect that SM adoption has on financial performance.

Improving Automotive Component Supplier Service through Physical Distribution Activities to Original Equipment Manufacturers (OEMs)

Purpose/objectives: The purpose of this study was to investigate whether physical distribution activities can significantly improve customer service for automotive component suppliers to Original Equipment Manufacturers (OEMs) in the Eastern Cape. Design/methodology/approach: By means of non-probability sampling, namely convenience sampling, 50 automotive component suppliers in the Eastern Cape were visited. Each business firm received four questionnaires to be completed by logistics practitioners. Altogether, 126 usable questionnaires were returned. The data were collected by means of a survey using a self-administered, structured questionnaire. Findings/results: The results indicated that physical distribution activities, such as transportation management and order processing, were significant predictors of customer service. Practical implications: The results have managerial implications where the logistics department should continuously update its transportation and order processing systems to keep abreast of the best practices within the automotive industry. The results could be used by managers to highlight the benefits of improved customer service, focusing on a firm’s transportation and order processing activities. Originality/value: Based on the results of the study, it is recommended that automotive component suppliers in the Eastern Cape employ transportation management and order processing (activities of physical distribution) to improve customer service. It is also recommended that the automotive component suppliers regularly benchmark their logistics practices against world-class business firms, as the results may have a positive effect on the way transportation and order processing activities are managed and executed if customer service is to be improved.

A user review data-driven supplier ranking model using aspect-based sentiment analysis and fuzzy theory

Background:The supplier selection problem is a sophisticated decision-making process that involves evaluating multiple factors. While previous research has primarily focused on objective attributes, such as supplier qualifications, product quality, and price, the subjective opinions of users have often been overlooked. However, with the growing importance of user reviews and sentiment analysis in e-commerce, incorporating users’ opinions on supplier products can provide valuable insights. Purpose:This study aims to address the limitations of existing supplier selection approaches by proposing a comprehensive framework that integrates aspect-level sentiment analysis and a fuzzy multi-attribute decision model. The goal is to enhance the decision-making process by considering both objective attributes and subjective opinions. Methods:To achieve this, we develop a novel convolutional neural network (CNN) model with a gating mechanism to perform aspect-level sentiment analysis. Furthermore, we propose a fuzzy multi-attribute decision model that combines the predefined sentiment aspects with traditional evaluation criteria. The model is applied to a dataset specifically designed for automotive component supplier selection. Results:Experimental results demonstrate the superior performance of our approach compared to existing methods and datasets. A case study demonstrates the combination of aspect-level sentiment analysis and the fuzzy decision model allows for a more comprehensive evaluation of suppliers. Conclusion:By integrating aspect-level sentiment analysis and the fuzzy multi-attribute decision model, our proposed framework offers a novel perspective on supplier selection problems. The results highlight the feasibility and superiority of our approach, providing valuable insights for management in making informed decisions. This research contributes to the fields of supplier selection, sentiment analysis, and decision-making, with potential applications in various industries beyond the automotive sector.

Sources of knowledge and process innovation: The moderating role of perceived competitive intensity

Global competition means that firms are under pressure to systematically develop the efficiency of their manufacturing processes. However, little has been said in the international business literature about how firms, especially those subject to severe barriers, can search for knowledge within and across national boundaries to help in the development of process innovation. We build on key aspects of the innovation and search strategy literature to develop our conceptual model and hypotheses, which we test in the context of a less-developed, isolated, and closed economy, using data from 171 automotive component suppliers in Iran. We find that foreign knowledge search is positively related to process innovation, even in an economy that operates under severe economic sanctions. This contributes to the international business field by providing evidence that, while economic sanctions are increasingly used in modern geopolitics by the world’s most powerful countries, these actions may fail to achieve their goals with respect to individual businesses.

Commitment as a buyer-supplier antecedent for supply chain sustainability

The South African automotive industry is an important sector that contributes substantially to the country's economy. The sustainability of local suppliers within South African automotive supply chains is under threat because of global pressures, especially competition from low-cost countries. Increased pressure leads to conflict between international buyers and local suppliers. The result is strained relationships, causing lower levels of commitment, often increasing risk and threatening the sustainability of local suppliers. The aim of this study was to determine whether commitment as an antecedent within supply chains exists and whether such a precursor has an effect on sustainability within South African automotive supply chains. The study found, through the application of a linear regression model, that commitment could potentially contribute to vital supply chain sustainability in South Africa. The results point automotive component suppliers towards investing in a relational governance strategy to enhance buyer commitment and thus contribute to business sustainability.

Commitment as a buyer-supplier antecedent for supply chain sustainability

The South African automotive industry is an important sector that contributes substantially to the country's economy. The sustainability of local suppliers within South African automotive supply chains is under threat because of global pressures, especially competition from low-cost countries. Increased pressure leads to conflict between international buyers and local suppliers. The result is strained relationships, causing lower levels of commitment, often increasing risk and threatening the sustainability of local suppliers. The aim of this study was to determine whether commitment as an antecedent within supply chains exists and whether such a precursor has an effect on sustainability within South African automotive supply chains. The study found, through the application of a linear regression model, that commitment could potentially contribute to vital supply chain sustainability in South Africa. The results point automotive component suppliers towards investing in a relational governance strategy to enhance buyer commitment and thus contribute to business sustainability.

Antecedents of trust among buyer and seller within the South African automotive supply chains

Background: Positive supplier relationships result in trust and eventually sustainability. However, the opposite seems to be true in the South African automotive supply chain relationships that are characterised by conflict. Literature states that in the absence of trust, sustainability is compromised. The problem pertains to the erosion of trust because of conflict between suppliers in the South African automotive supply chains. Objectives: The main purpose of the research was to address the question: What are the antecedents of trust between buyer and seller within the South African automotive supply chains? The primary objective was to determine the value-adding antecedents of trust followed by presenting the antecedent with the strongest correlation towards trust. Method: The study was explanatory and descriptive by nature to determine relationships between constructs. The empirical research utilised a quantitative census, thus targeting all senior managers representing Tier 1 automotive component suppliers. A deductive approach through a structured close-ended questionnaire tested the managers’ perception on trust. The response rate was 81.4% with 144 participants. After factor analysis, a path analysis was compiled, depicting the antecedents of trust. Results: The study found that antecedents showing the strongest correlation with trust were the core offering, inclusive of product delivery and quality followed by personal interaction that forms part of the sourcing process. Conclusion: The research study makes a theoretical contribution by presenting a conceptual structure on trust by depicting its antecedents. Managerial contributions include recommendations on how to enhance trust through a relational governance strategy.

Modelling cause and effect relationship among enablers of innovation in SMEs

PurposeInnovation is a prerequisite for economic and technological growth of any organization. Identifying enablers of innovation can help managers accelerate the process of economic growth. The purpose of this paper is to identify the prominent enablers of innovation in small and medium enterprises (SMEs) that can help overhauling organizations and benefit them economically.Design/methodology/approachA comprehensive literature review and expert’s opinions have been applied to identify enablers of innovation. A case of automotive component supplier is considered for conducting the research. A coalescence of Grey and DEMATEL methodologies has been incorporated to first rank the enablers of innovation based on their importance and then identify the causal relationship among these enablers by characterizing enablers into causal and effect groups.FindingsA few important enablers, namely, entrepreneur traits, knowledge management, resources for innovation, and linkage capabilities, have been identified as prominent enablers for successful innovation in SMEs.Practical implicationsThis paper identifies enablers of innovation in SMEs and the causal relationship between these enablers. The identified enablers and the causal relationship between these enablers will help managers of small organizations in selecting the enablers that need to be focused on, which, in turn, can drive other enablers of innovation, thus saving time and resources of the organizations.Originality/valueThis paper uses a novel Grey–DEMATEL methodology to identify the causal relationship among enablers and also contributes to the literature on innovation by identifying enablers of innovation in SMEs.

Engineering change management maturity assessment model with lean criteria for automotive supply chain

ABSTRACTSupplier relationships in the automotive industry have changed fundamentally in recent decades owing to trends such as less vertical integration, global sourcing, simultaneous engineering, and the Internet. Suppliers have become much more important in terms of both production and development. The ability to manage engineering changes (EC) efficiently and reliably reflects the capability of the whole supply chain. EC is a modification of a product's component after the product has entered serial production. This paper reviews engineering change management (ECM) and the application of lean methods into the product development process. The conclusions from the literature review are summarised in a model for assessing the maturity level of lean ECM. The model is tested within eight automotive component and system suppliers of different sizes, from 196 up to 77000 employees. The result of the survey is a comprehensive overview of ECM status with automotive suppliers. An important conclusion is that ECM should begin already during product development process. Knowledge management was recognised as a key enabler for reducing the number of ECs.

An Investigation Into the Personal Interaction Items Which Best Explain the Variation in Trust Within Automotive Supply Chains

The sustainability of automotive component suppliers is under threat due to various global challenges. Literature suggests that only the actual personal relationship can differentiate suppliers within supply chains. Literature further encourages more insight into the conceptualization of personal interaction and trust within supply chains. This paper reports on research that tested the importance of trust and its directional linear relationship with personal interaction. Personal interaction revealed a significant correlation with trust, indicating that actions of the Tier 2 supplier during the sourcing process can substantially influence trust with the Tier 1 buyer. It is accordingly crucial for automotive component suppliers to invest in strategies to increase their personal interaction with their buyers in order to promote trust and in turn to promote perceived customer value and customer retention.

Knowledge exchange and social capital in supply chains

PurposeThe purpose of this paper is to contribute toward a better understanding of the impact of social capital on knowledge exchange within supply chains. An exploratory case study approach is used to identify the effects of social capital across multiple organizational levels and to consider how these effects relate to the mode of supply chain governance.Design/methodology/approachA comparative case study investigation was undertaken of two Indonesian automotive component suppliers. Qualitative research methods were used with data collection involving semi-structured interviews with 64 participants at three different levels within each company (senior managers, middle managers and shop floor staff).FindingsComparisons between the cases highlight the major consequences that internal differentiation within organizations had in moderating the effect of social capital upon knowledge exchange in supply chains. Social capital had both enabling and inhibiting effects and these were dependent upon how social capital was constituted within and between organizations. Interaction effects between levels and with the mode of governance adopted were also important.Research limitations/implicationsFuture research would benefit from a multidimensional analysis of social capital in supply chains which considers potentially disparate and contradictory effects which may be apparent when social capital is examined at different levels of analysis and in relation to different modes of governance.Originality/valueThe paper uses in-depth exploratory case research to complement existing survey-based work and contributes to the further conceptualization of relationships between social capital, knowledge exchange and modes of governance in supply chains.

The dynamics in customer-supplier relationships in South African automotive supply chains

Although the automotive industry is of utmost importance to the South African economy, the industry is faced by numerous challenges brought about by increased globalisation pressures including strained customer-supplier relationships resulting in increased supply chain risks. Literature suggests automotive component suppliers have limited scope for differentiation, and are left with only the relationship to add value, which promises to mitigate risk. The study reported on in this paper asked the following question: What is the nature of customer-supplier relationships in automotive supply chains in South Africa with regard to the dynamics between the elements of relationship value, trust and commitment? Through hierarchical regression, trust revealed a direct and strong correlation with relationship value, whilst commitment acted as a partial mediator. An important risk mitigation strategy might be the investment in close customer-supplier relationships. This paper makes a valuable contribution towards the theoretical conceptualisation of relational governance within automotive supply chains.

The correlation between relationship value and business expansion in the South African automotive supply chains

Background: The South African automotive industry includes complete supply chains. The South African automotive supply chain stakeholders operating within the global arena are faced with opportunities as well as challenges. The South African government supports the automotive industry and encourages the vision to drastically expand the industry by the year 2020. However, having to adhere to strict prescriptions from customers regarding product quality and logistics, automotive component suppliers have only the actual relationship with customers through which value can be added. Literature acknowledges the importance of relationship value and agrees that it results in business retention. However, literature fails to prove whether relationship value can result in business expansion where more business is generated.Objectives: The objective of this article was to provide a better understanding of how to optimise relationship value within the South African automotive supply chains between Tier 1 and Tier 2 suppliers. Furthermore, the correlation between relationship value and business expansion was tested through a linear regression model. It was also important to determine whether supply chain stakeholders from different countries of origin and cultural backgrounds attach the same importance to relationship value.Method: This article reports on research which followed a positivistic paradigm, through a quantitative study undertaken in the South African automotive supply chains. Members of the National Association for Automobile Component and Allied Manufacturers of South Africa (NAACAM), defined as Tier 1 suppliers, were approached to describe their best Tier 2 suppliers. Questions relating to relationship value and business expansion were asked via a closed-ended questionnaire. The aim was to obtain the perceptions of Tier 1 suppliers of their best Tier 2 suppliers in terms of relationship value and business expansion. The data were analysed through a linear regression model.Results: It was found that relationship value directly correlates with business expansion and is therefore highly regarded as important by Tier 1 suppliers in terms of their Tier 2 suppliers in the South African automotive supply chains. Notwithstanding the different countries of origin, respondents are in agreement regarding the importance of relationship value.Conclusion: As the South African automotive industry plays an important role in the South African economy, all efforts should be made to retain and expand the industry. The industry is characterised by a difficult economy, and supply chain role players should constantly investigate new strategies to gain a competitive advantage. It was found that there was a high regard for relationship value which could result in business expansion. Automotive component suppliers are encouraged to invest in a relationship value governance strategy to actively pursue added benefits for all stakeholders.

Relationship value antecedents in the South African automotive component supply chain

Orientation: Although literature agrees on the importance of ‘relationship value’, the term is still seen as ambiguous and authors fail to agree on its antecedents. Within a challenging global arena, relationship value is believed to result in business retention. It is therefore critical to have a better understanding of this value to ensure business sustainability within supply chains. Literature suggests that relationship value drivers comprise three dimensions, namely a core offering, sourcing process and customer operations.Research purpose: The contribution of the research reported on in this paper is an enhanced conceptual understanding of relationship value and its salient drivers within the South African automotive supply chains.Motivation for the study: Literature invites more research on relationship value and its drivers. Therefore, the research reported on tested the antecedents of relationship value.Research design, approach and method: Relationship value drivers were tested through empirical research within the South African automotive supply chains by means of a path analysis. The research utilised a closed-ended questionnaire, and targeted managers among Tier 1 buyers and asked them about the relationship value traits of their best Tier 2 suppliers.Main findings: It was found that personal interaction, which forms part of the sourcing process, is viewed as the strongest antecedent of relationship value within the South African automotive supply chains, followed by product quality and delivery.Practical/managerial implications: It is suggested that superior supply chain practices within the South African automotive industry might secure business retention. Automotive component suppliers are therefore advised to implement relationship value strategies to promote higher value through personal interaction.

The Application of a Knowledge Management Framework to Automotive Original Component Manufacturers

Aim/Purpose: This paper aims to present an example of the application of a Knowledge Man-agement (KM) framework to automotive original component manufacturers (OEMs). The objective is to explore KM according to the four pillars of a selected KM framework. Background: This research demonstrates how a framework, namely the George Washington University’s Four Pillar Framework, can be used to determine the KM status of the automotive OEM industry, where knowledge is complex and can influence the complexity of the KM system (KMS) used. Methodology: An empirical study was undertaken using a questionnaire to gather quantitative data. There were 38 respondents from the National Association of Automotive Component and Allied Manufacturers (NAACAM) and suppliers from three major automotive OEMs. The respondents were required to be familiar with the company’s KMS. Contribution: Currently there is a limited body of research available on the KM implementation frameworks for the automotive industry. This study presents a novel approach to the use of a KM framework to reveal the status of KM in automotive OEMs. At the time of writing, the relationship between the four pillars and the complexity of KMS had not yet been determined. Findings: The results indicate that there is a need to improve KM in the automotive OEM industry. According to the relationships investigated, the four pillars, namely leadership, organization, technology and learning, are considered important for KM, regardless of the level of KMS complexity, Recommendations for Practitioners: Automotive OEMs need to ensure that the KM aspects are established and should be periodically evaluated by using a KM framework such as the George Washington University’s Four Pillar Framework to identify KM weaknesses. Recommendation for Researchers: The establishment and upkeep of a successful KM environment is challenging due to the complexity involved with various influencing aspects. To ensure that all aspects are considered in KM environments, comprehensive KM frameworks, such as the George Washington University’s Four Pillar Framework, need to be applied. Impact on Society: The status of KM management and accessibility of knowledge in organizations needs to be periodically examined, in order to improve supplier and OEM knowledge sharing. Future Research: Although the framework used provides a process for KM status determination, this study could be extended by investigating a methodology that includes KMS best practice and tools. This study could be repeated at a national and international level to provide an indication of KM practice within the entire automotive industry.

How Did the Automotive Component Suppliers Cope with the Economic Crisis in Hungary?

This article studies the reaction of automotive component suppliers in Hungary to the 2008–2009 economic crisis. We find that the global suppliers viewed the crisis as an opportunity to reinforce the competitiveness of their Hungarian affiliates by engaging in product and process upgrading, and upgrading through research and development. The regional suppliers combined defensive strategies aimed at reducing costs with offensive measures in the form of product upgrading, production upgrading and expansion into new markets. The local suppliers reduced costs and reduced their workforce, but also reacted offensively by expanding into new markets, upgrading their activity and collaborating with other local suppliers.

Relationship Value, Trust And Supplier Retention In South African Automotive Supply Chains

Suppliers have a particular role to play in assuring competitiveness in supply chains. This article investigates the relationship between first and second tier suppliers in automotive supply chains in South Africa. Automotive component suppliers (first tier suppliers to assemblers (OEMS) such as Toyota) should make an extra effort to retain their suppliers (second tier), particularly suppliers of strategic parts, to assure the best value adding by the suppliers in the highly competitive supply chain landscape. To assure best value from suppliers they need to be retained in an active trusting, long term, collaborative relationship. The more the customer trusts the supplier, the higher the perceived value of the relationship and the more likely parties will work together to retain the business relationship. The aim of this quantitative study amongst first tier suppliers is to obtain more insight into the relationships and the hierarchical correlation between the relationship value, trust and supplier retention in automotive supply chains in South Africa. With a regression analysis it was found that both trust and relationship value are substantial predictors of supplier retention, but trust is more important for supplier retention.

Voting for staying. Why didn’t the foreign-owned automotive component suppliers relocate their activity from Hungary to lower-wage countries as a response to the economic crisis?

On the basis of interviews with 10 foreign-owned automobile component suppliers in Hungary and the collection of indirect information, this article explains why the multinationals did not relocate their activity from Hungary to lower-wage countries as a response to the economic crisis. We suggest that the four ‘keep factors of location’ – additional investments of the automobile manufacturers, unchanged labour market regulation, changes in government policy and the existence of few alternative sites of relocation – were more dominant than the two main ‘push factors of relocation’ – relatively low sunk costs and low dependence on the local environment.

Fuzzy AHP approach to prioritize enablers of green supply chain management practices: A case study of automotive component supplier

Article history: Received January 5, 2016 Received in revised format April 15, 2016 Accepted May 20, 2016 Available online May 22, 2016 With superlative growth in the number of small organizations over the past two decades, the impact caused to environment due to higher production output is also immense. Most governments are continuously taking measures to mitigate the risks associated with industrial growth. One such measure is to implement green practices throughout the supply chain. Since small organizations are important part of supply chain and a major contributor of industrial output they also need to implement green supply chain practices. This paper aims to find out important enablers for green supply chain management (GSCM) from the view point of micro small and medium enterprises (MSMEs). Fuzzy analytical hierarchy process methodology has been used to rank the enablers, three important enablers were identified viz. top management commitment and finance, government support and regulations and recycling and reuse efforts. Managers of small organizations can benefit immensely by focusing on implementing these practices in their organizations. © 2016 Growing Science Ltd. All rights reserved.

Autostack - CORE - Industry Led European Consortium to Develop Next Generation Automotive Stack Hardware

Most of international automotive OEMs have announced plans for the commercialization of fuel cell vehicles in the next years. While this is a clear signal for the functional readiness of fuel cell technology in automotive application, durability, efficiency, power density and cost of the fuel cell stack need further advancements in years to come. “Auto-Stack Core” is a European funded collaborative project establishing a coalition with the objective to develop best-of-its-class automotive stack hardware with superior power density and performance while using components manufactured in an industrial scale and meeting commercial target cost. The project consortium combines the collective expertise of European automotive OEMs, component suppliers, system integrators and research institutes thus removing critical disconnects between stakeholders. The technical concept is based on the Auto-Stack assessments carried out under an FCH JU Grant from 2010 to 2012 andreflects the system requirements of major OEMs. It suggests a stack platform concept with the aim to substantially improve economies of scale and reduce critical investment cost for individual OEMs by sharing the same stack hardware for different vehicles and vehicle categories. Technical stack development is set up in 3 evolutions. So far stack evolution 1 has been designed, built and tested. The stack is based on components ready for manufacturing on an industrial scale. Metallic bipolar plates have been used to fulfill volume and cost targets. The following results have been achieved in evolution 1: Achievements Evolution 1 Final Specification Evolution 3 Power 94 kW (continuous) 99 kW peak for 30 sec 98 KW (continuous) 118 kW peak 30 sec Power density 2.7 kW×l-1 (continuous) 2.9 kW×l-1 peak for 30 sec 2.8 kW×l-1 (Continuous) 3.4 kW×l-1 peak for 30 sec Freeze-start capability Demonstrated from -20 °C From -25 °C Specific stack cost 47.32 €×kW-1 @ 30 000 p.a. < 40.00 €×kW-1 @ 120 000 p.a. According to a benchmark study of state-of-the-art stack development including innovative material and component solutions, the stack specifications for evolution 3 are within the most demanding in the industry. Industrial participation in the project and lead of critical work packages by industrial partners will ensure compliance of project objectives with industrial needs and allow direct implementation and utilization of the results. The project is of strategic importance for the competitiveness of the European supply industry and provides a critical contribution to supporting the commercialization of fuel cell and hydrogen technologies in Europe. The work reported has been supported by the Fuel Cell and Hydrogen Joint Undertaking under Grant Agreement 325335. Figure 1